WHEN the Federal Reserve’s Open Market Committee (FOMC) decides whether to raise interest rates at the meeting starting on June 14th, representatives of the Fed’s regional branches will cast half of the ten votes. Unlike Janet Yellen, the Fed’s chair, Stanley Fischer, her deputy, or three other sitting Fed “governors”, these regional Fed “presidents” were not nominated by the White House, nor confirmed by Congress, but were elected within their respective institutions. This is not without controversy. Conspiracy theorists claim that the regional Fed banks are a “banking cartel”; more sober critics, like Hillary Clinton and Bernie Sanders, say regional Feds give commercial banks too much power. So how does it work?
